The Silver Lining of HSAs

More employers today are offering health savings accounts, or HSAs, and high-deductible health care plans for their employees -- and over time, they might become the only plans offered, according to a Towers Watson survey.

That means that,in addition to worrying about retirement savings, you might also have to deal with setting aside enough money for a high-deductible planand other health careexpenses.

But there's a silver lining: these accounts might actually benefit your health.

What's an HSA?Consumer-driven health plans, as they are collectively known, involve opening an HSA and signing up for high-deductible health care plans. These plans require that you cover a significant chunk of medical expenses before the plan kicks in with financial assistance. That makes them particularly attractive if you're in good health and just want coverage for catastrophes, as you only need to pay if something big comes up.

On the other hand, you end up paying a high deductible in those situations, and you absorb the cost of pretty much any other medical service, like checkups, lab tests, and medications.This means that you could use up your deductible pretty quickly if you regularly need medical services -- the deductible amount varies, but it could be up to several thousand dollars.

The reason HSAs exist is to help you accumulate that money. You can make tax-free contributions to an HSA, and your growth and withdrawals are also tax-free provided they're used for qualified medical expenses.

How an HSA can impact your decision-makingWhat's really interesting about HSAs is that they eliminate a potential source of what behavioral economists call moral hazard.

Moral hazard economics tells us that having to bear the cost of our decisions makes us more likely to make the "right" one. For example, if you're diabetic and painfully aware of how much forgetting to manage your diabetes will cost you in medical expenses, you might be far less likely to get lazy about it.

With HSAs and high-deductible plans, the cost of your lifestyle decisions becomes very clear. Suddenly, that extra slice of pizza or unused gym membership might not seem like such a good idea -- after all, it could end up eating into your health savings.

The beauty of consequencesAstudy of these health plans found that they are, indeed, pretty good at getting people to do the "right" thing when it comes to their health.

While high-deductible participants don't look different from their traditional counterparts -- about 50% of members in both types of plan have health problems -- they are better at reducing lifestyle risks. One study found that HSA users had slower-growing health costs and were 21% more likely to engage in disease-management programs.

They also use up to 23% more preventive care services and are more likely to get screened and immunized. To be fair, high-deductible plans are more likely to offer these as free services, because health insurance companies would prefer catch a major problem sooner rather than later. But everyone benefits whenparticipants make healthier decisions to try to save on their own medical costs.

The lesson: sometimes not having a free lunch is a good thingSometimes, bearing the economic costs of your decisions serves you better than not having to see them.

It's a financial lesson that could be good for your health on many levels. That several thousand dollars sitting in the bank -- and the potential pain of losing it to health issues you might have prevented -- could be a great motivator to go for those checkups, get to the gym, and skip the jumbo fries.

That is what we call a silver lining to an otherwise potentially expensive health care cloud.

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